Have you disclosed interest on FD, bank savings? If not, you’ll have to pay heavy penalty

Finance

 

Many taxpayers who did not disclose high-value income in their income tax return (ITR) for the financial year 2019-20 have received scrutiny notices from the Income Tax Department.

“The Income Tax Department has identified high value information which does not appear to be in line with the Income Tax Return filed for Assessment Year 2020-21 (relating to FY 2019-20). Please revise ITR / submit online response under e-Campaign tab on Compliance Portal (CP). Access CP by logging into e-filing portal and clicking on ‘Compliance Portal’ link under ‘My Account’  or ‘Compliance’ tab  – ITD,” reads the SMS sent to assesses.

There could be multiple reasons for taxpayers receiving the I-T notice. The prominent ones being non-reporting of FD interest and savings bank account interest in the ITR. If the data provided by bank does not tally with the information provided in the ITR, the I-T department can send a notice. This, however, doesn’t mean that the taxpayer has been found guilty of committing a fraud. The taxpayer just needs to clarify the reason to the tax department or file a revised ITR.

“Banks file AIR (Annual Information Return) every year, which carries details of high-value transactions such as fixed deposits. The Income-Tax Department has started comparing AIR with ITR filed by the assessee. On the basis of such comparisons, the department is sending messages and emails to all such assessees. Many of my clients have received such emails over the last few days,” says Chartered Accountant Ankit Gupta.

HOW TO CLOSE THE ISSUE

There is no need to panic. However, the taxpayer should not ignore the notice. “The notice should be responded to in the manner the Income-Tax Department prescribes. There may be a demand for income and tax proofs and there will be a deadline you must adhere to. If you can draft your own response, well and good. But if you’re struggling with the legalese in the notice, it would be advisable to reach out to a tax advisor without delay. Let them draft a response that you can send as per the deadline. These days, the correspondence happens on email and you will probably not have to have a face-to-face meeting with an assessment officer,” says Adhil Shetty, CEO & Co-Founder, BankBazaar.com.

In order to respond to the query, taxpayers can visit the Compliance Portal of the Income Tax Department and verify the records there. If the information there is correct then the taxpayer can accept it and file the revised ITR before March 31, 2021 or by the deadline mentioned in I-T communication.

There are some cases in which duplicate entries have been recorded. “If assessee notices any duplicate entry there, he may mark ‘duplicate’ on Income Tax Portal (option is there on the portal), then file the revised ITR after excluding such duplicate entry and including other entries,” Chartered Accountant Ankit Gupta says.

 

 

 

 

 

Source: businesstoday

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